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Showing posts with label PFRDA. Show all posts
Showing posts with label PFRDA. Show all posts

Saturday, 28 October 2017

09:17

PFRDA:Increase Pension Coverage &Incentives Payable to POPs,NPS

PFRDA:Increase Pension Coverage &Incentives Payable to POPs,NPS
PFRDA takes a new initiative to increase pension coverage by increasing the incentives payable to Points of Presence (POPs), the principal distributive points for NPS. 
Pension Fund Regulatory and Development Authority (PFRDA) has taken several initiatives in the past few years to increase pension coverage in the country, notably introducing e-NPS, reducing minimum contribution levels, new investment instruments, aggressive life cycle funds etc. PFRDA has now taken a further step in this direction by increasing the incentives payable to Points of Presence (POPs), the principal distributive points for National Pension System (NPS).
The following Table gives the details of increase in incentives:
Principal Distribution Point
Services offered
Current Charge
New Charge
POP
Initial Subscriber Registration*
Rs. 125/-
Rs. 200/-
Initial Contribution
0.25% of the contribution Min: Rs. 20/- & Max : Rs.25,000/-
0.25% of the contribution Min: Rs. 20/- & Max : Rs.25,000/-
All Subsequent Contribution
All Non-Financial Transaction
Rs. 20/-
Rs. 20/-
Persistency*
-----
Rs. 50/- per annum (only for NPS-All Citizen)
e-NPS* (for subsequent contributions)
0.05% of the contribution Min Rs 5/- & Max Rs 5000/- (Only for NPS- All Citizen and Tier-II Accounts)
0.10% of the contribution Min Rs 10/- & Max Rs 10000/- (Only for NPS- All Citizen and Tier-II Accounts)

*Changes effected
A new incentive towards increasing persistency has been introduced under which POPs will receive an incentive of Rs. 50/- per account per annum for every account which continues to contribute a minimum of Rs 1000/- in a financial year.
 PFRDA believes that the renewed incentive will help in increasing the reach of pensions in India, through the efforts of Points of presence (POPs).

Source:PIBNEWS


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Monday, 2 January 2017

07:53

Open NPS a/c via Aadhaar, avoid form

Open NPS a/c via Aadhaar, avoid form

New Delhi: Simplifying the process, pension fund regulator PFRDA has dispensed with the requirement of submission of physical application form for opening an NPS account if done through Aadhaar verification and e-signature. Pension Fund Regulatory and Development Authority (PFRDA), in October 2013, had allowed acceptance of e-KYC as a valid process for ‘Know Your Customer’ verification in addition to the other permitted documents of identity and address. PTI

Source:Tribune News
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Monday, 3 October 2016

16:34

Central Government Employees Pension -Before 2003 and after 2004 appointment

Central Government Employees Pension -Before 2003 and after 2004 appointment 

It’s No Pension Scheme

Discontent is simmering among the government employees and teachers over the Contributory Pension Scheme also called the National Pension Scheme that was launched in 2003 by the then NDA government. The united Andhra Pradesh government and later the Telangana State governments have also adopted the scheme.

The existing employees in 2003 did not react much as it did not impact them.  But, as the government recruitments continued after 2004, the ranks of government employees denied the defined benefit pension and brought under this contributory pension scheme started to swell. They are realising its ill-effects on them. There are about 1.15 lakh such employees in Telangana and another 1.56 lakh in Andhra Pradesh, who are affected by the New Pension Scheme.

As per this scheme, the central government employees appointed on or after January, 1, 2004 will come under this scheme. Until then, the government employees were getting pension as an additional post-retirement benefit. But, the new scheme provides for pension based on the contributions from the employees accrued in a fund set up for the purpose.

The Pension Fund Regulatory Development Authority Act (PFRDA) was enacted by the then UPA government in 2013 with the support of the major opposition, NDA. In accordance with the Act, the pension funds will be invested in the stock market and the quantum of pension being subject to its vagaries.  The lives of the retirees would therefore swing as per the bulls and bears of capital market.

The government and the promoters of PFRDA Act argued that the retired employees are to be benefitted immensely by the New Pension Scheme as the markets would yield them wealth. But, this wealth perceived is actually market capitalisation. Its estimates are just notional. In the previous scheme, the pension benefit was defined and calculated based on the last drawn pay. Apart from this defined pension, the retired employees in the old scheme would also get other benefits like gratuity and commutation.

But, in the new pension scheme, the quantum of pension is completely dependent on the price fluctuations in the market. If the market plunges due to one sentiment or the other, then the retirees would be losing heavily for no fault of theirs. Stock markets across the world are prone to either manipulation or speculation. The uncertainties deprive the government employees the luxury of planning their retired life as they become vulnerable to the peculiar behaviour of stock markets.

The origins of PFRDA are in the Project OASIS (expert       committee) Report (December, 1999), which was constituted by the first NDA government. However, the tripartite Central Board of Trustees of the Employees Provident Fund had, in a special meeting held on February 8, 2000 and was chaired by the then labour minister, unanimously held: “the (said) report is investment centric and not social security or social insurance centric and contains a number of recommendations and suggestions, which are inconsistent with the ground reality or practical considerations.”

The CBT was “unanimously of the opinion that the proposals in the report … would seriously jeopardise the safety and future savings of the workers as well as the whole concept of social security and social insurance.” Even the Bhattacharya Committee, appointed by the NDA government, did not recommend only a ‘defined contribution’ scheme, which is the case with the New Pension System. It recommended a hybrid Direct Benefit /Direct Contribution or mixed scheme.

The policy of pension reforms emerges out of the World Bank report titled, “Averting the Old Age Crisis”. This report advocated pension sector reforms. The essence of the World Bank report  was not to tackle the crisis  faced by the elderly in their old age  as professed in the title of the report , but , to resolve the ‘crisis’ of the pension pay out burden of the governments world over.   

This new scheme works out as follows. The gratuity and commutation amount are paid out of the 60 percent withdrawn from the accumulated contribution of the employees during their service. The remaining 40 percent will be invested in the annuities. The income yielding out of this would be paid as pension.

In the old pension scheme, the amount was essentially dependent on the maximum wage one reaches by the time of retirement. The other benefits like gratuity, commutation availed in the old Pension Scheme are non-taxable but 60 percent withdrawals at the time of retirement under the New Pension Scheme are subject to taxation.

The pension amount earlier was guaranteed. But, now, it is left to markets. When the UPA government defended the New Pension Scheme stating that it would yield more returns than the pension obtained otherwise, Members of Parliament asked the government to ensure a minimum guaranteed pension in the PFRDA act itself.

The then prime minister Manmohan Singh simply replied how it can be guaranteed as it was dependent on market movements. Infact Section 20(2)(g) of PFRDA Act  inter-alia, provides: “there shall not be any implicit or explicit assurance of benefits except market based guarantee mechanism”.
The government employees under this new pension scheme will be deprived of the government Provident Fund account. Thus they will be losing the interest on the GPF accruals and the facility of partial withdrawals from the GPF.

All the government employees appointed on or after January, 1, 2004 were contributing 10 percent of their pay into the contributory pension scheme. The government would contribute a matching amount. This money is in the National Securities Depository Limited (NSDL). The fund managers, who operate this fund, are investing the same in the markets.

The experience so far suggests that the net asset value accrued on these contributions is not even matching the bank interest. Thus, the employees who have earlier failed to comprehensively comprehend the implications of the New Pension Scheme started feeling the pinch of it. Hence, the disgruntlement!

Even the government is not going to benefit much as it has to contribute 10 percent as a matching grant. It is not therefore relieved of the pension burden. However, the industry gets access to massive public savings. The   magnitude of the public resources available for the private sector is evident from the following statistics. By the end of November, 2015, about 16 lakh central government employees were brought under this scheme.

The total amount accumulated accounts for about 44,000 crores. Similarly all the state government employees enrolled in the new scheme accounted for over 28 lakh. The  total amount was to the extent of over Rs 50,000 crore. This accrual will increase each passing year.

Even the Supreme Court held that pension is a social security measure and is the fundamental right.  The apex court in D.S. Nakara & Others vs. Union of India, 1982   stated that Pension is a right; not a bounty or gratuitous payment.

Pension also has a broader significance in that it is a social-welfare measure rendering socio-economic justice by providing old-age economic security to those who toiled ceaselessly in their youthful heyday. Privatising pension funds tantamounts to privatising social security and depriving the protective freedom enjoyed by the employees, who contributed to the government service for decades.   

The PFRDA Act applies to those appointed after 2004. However, the pace with which pension reforms are implemented across the world leaves no guarantee that the Act will not be mandatorily extended to the employees recruited prior to 2004, who are now in the old defined benefit pension scheme.

In case, if the government does so, it is unlikely that the courts will strike it down as Supreme  Court in many judgements held that when  the State  considered  it  necessary  to liberalise the pension scheme   in order  to augment  social security in  old age  to government  servants it  could not grant the  benefits of liberalisation only  to  those who retired subsequent  to the  specified date and deny the same to those who had  retired prior  to that date.

The government can escape judicial scrutiny claiming that New Pension Scheme benefits employees. Investing public savings in the stock markets should be the option of those who save. But, the New Pension Scheme makes it mandatory. Each employee will have his or her own priorities of expenditure in life. The economic necessities differ from person to person.

How can one be deprived of choice of spending one’s surplus income? Even if the government ascribes to itself the parental role, the mandatory savings should yield minimum guaranteed and better returns. The risk-absorbing capacity of a retiree will be limited and it varies from individual to individual.

Under this New Pension Scheme, the employees will not get any family pension facility. Besides, service charges will be collected from the employees for managing their pension funds.  As per the PFRDA Act, the government gives a matching grant. But, this may not stand as evident from the experience of pension reforms in other countries like in many East European countries.

The governments often implement fiscal austerity regime. They are legally mandated to control expenditure under Fiscal Responsibility and Budget Management (FRBM) Act. In such a situation, the possibility of government slashing its share of the contribution by amending the Act cannot be ruled out.  Noble laureate and former chief economist of World Bank, Joseph Stiglitz warned that pension privatisation can lead to worsening of economic crisis as evident from the experience of Argentina. 

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Monday, 18 July 2016

21:41

Atal Pension Yojana:Rs 100 crore released towards Government of India co-contribution in APY

Atal Pension Yojana:Rs 100 crore released towards Government of India co-contribution in APY

Atal Pension Yojana is being implemented through the APY Service Providers comprising of Public Sector Banks, Private Sector Banks, Regional Rural Banks, Cooperative Banks and Department of Post both in urban and rural areas across the country. The total number of subscribers registered under APY as on 30th June 2016 has crossed 30 lakh and every day nearly 5000 new subscribers are added. 
The scheme provides for a co-contribution from Government of India for those who have registered before 31/3/2016 with an amount of 50% of the subscribers contribution up-to a maximum of Rs. 1000/- and these subscribers will be eligible for co-contribution for a period of 5 years from 2015-16 to 2019-20. Only those subscribers who are not income tax payers and not part of any other social security schemes are eligible for Government of India co-contribution. Keeping in view the above, Government of India through PFRDA has released co-contribution for the FY 2015-16 for 16.96 lakh eligible subscribers amounting to Rs. 99.57 crores. The Subscribers who have any pending contributions in their APY account till March 2016 won't be paid with co-contribution. They have been advised by PFRDA to regularize their APY account so as to get Government of India co-contribution in the month of September. Government of India co-contribution is payable only when accounts are regular and the admissible Government of India co-contribution is paid into the Savings Bank account of the Subscribers. 
Atal Pension Yojana, provides minimum guaranteed pension ranging between Rs. 1000/- to Rs. 5000/- per month for the subscriber from the age of 60 years. The Same amount of pension is paid to the spouse in case of subscriber’s demise. After the demise of both i.e. Subscriber & Spouse, the nominee would be paid the pension corpus. There is also option for Spouse to continue to contribute in APY account of subscriber for balance period, on premature death of subscriber before 60 years, so that pension can be availed by Spouse. Also, if the actual returns on the pension contributions during the accumulation phase is higher than the assumed returns for the minimum guaranteed pension, such excess returns are passed on to the subscriber, resulting in enhanced scheme benefits. 


Source:PIBNEWS 
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Tuesday, 10 May 2016

08:14

PFRDA is planning a nationwide training programme for all the government and non-government nodal offices primarily to increase the awareness and expand the reach of NPS into the nooks and corners of the country.

PFRDA is planning a nationwide training programme for all the government and non-government nodal offices primarily to increase the awareness and expand the reach of NPS into the nooks and corners of the country.

PFRDA organises its POP conference on National Pension System; Chairman, PFRDA stresses upon the need to expand the coverage of pension sector across the informal sector in the country which occupies almost 90% of the workforce

Pension Fund Regulatory Development Authority (PFRDA) organised its POP

Conference on National Pension System here today. The prime objective of the Conference was to provide a platform to discuss and deliberate on key issues encountered in the coverage of pension sector, the budget announcements relating to the tax benefits and the need and ways to expand the pension coverage across the country. The Conference saw an active participation of all the major Public and Private Sector Banks and the non-Bank Point Of Presence (POPs). In the inaugural address, Dr Badri S Bhandari, Whole Time Member, PFRDA welcomed the participants and brought to fore the scope of improvement vis a vis performance of the POPs in expanding the coverage of NPS in the Private and Corporate segment while acknowledging the good work done by some of the POPs. Currently, the unorganised (all citizen segment) and the Corporate sector comprises of only 5.6% of the subscribers and 9.0% of the AUM under NPS and only 7500 out of 55600 POP branches i.e. 13%, are active in sourcing NPS accounts. He emphasised the need for the activation of all the branches of POPs who are the eyes and face of the system and awareness creation and quality service to the subscribers. He informed that PFRDA is exploring the development of NPS module linked with core banking solutions of the Banks in line with the APY module.

Shri Hemant G. Contractor, Chairman, PFRDA, in the keynote address, stressed upon the need to expand the coverage of pension sector across the informal sector in the country which occupies almost 90% of the workforce. India has the highest percentage of informal workforce in the world, which is largely uncovered by any pension scheme. The demographic changes impacting the need to provide for pension includes increasing longevity, nuclear families and the ever increasing proportion of old age people, especially women whose longevity is higher. These factors have brought the issue of pension centre stage in most of the policies of nations worldwide. NPS has the advantage of market commensurate returns, flexible options, transparency and low cost. He also added that effort was required to meet the challenges facing the unorganised sector including low awareness, low income levels and the lack of long term vision to save for the future. Moreover, 10% of the senior citizen population in the world resides in India and this number would increase from current 100 million to 300 million by 2050 and hence the sense of urgency to expand the coverage to meet the challenge of exponentially increasing fiscal pension liability. PFRDA is planning a nationwide training programme for all the government and non-government nodal offices primarily to increase the awareness and expand the reach of NPS into the nooks and corners of the country.

The event was graced by presentations by eminent partner and tax expert Mr Kuldip Kumar, PricewaterhouseCoopers Pvt. Ltd. and Mr Kulin Patel, Actuary and Analyst, Willis Towers Watson. The eminent speakers brought to light various tax benefits available under NPS especially section 80CCD (1) and 80 CCD (1B).For Corporates, NPS entails no additional costs but offers attractive tax benefits. NPS stands at a very advantageous position in comparison to superannuation funds and there is a need to spread the awareness about benefits under NPS. An award function was also hosted during the conclave during which awards were distributed to the best performing Points of Presence for their performance in the National Pension System during 2015-16. HDFC Securities Limited received the award for being the best POP under All citizen model, Corporate model and Private sector. State Bank Of India won the award under the category of highest POP branches activation. ICICI Securities Ltd won under the category of best POP-branch with highest subscriber registration. Currently, NPS has more than 1.20 crore subscribers with total Asset Under Management (AUM) of more than Rs.1.20 Lakh crore.

Source:PIBNEWS
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Wednesday, 27 April 2016

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Saturday, 12 March 2016

07:44

Online Application for Withdrawal under New Pension Scheme

Online Application for Withdrawal under New Pension Scheme

The Pension Fund Regulatory and Development Authority (PFRDA) had issued a Circular dated February 25, 2015, making it mandatory for all the Nodal Offices to process the withdrawal claims of their underlying subscribers on the online platform made available on the Central Recordkeeping Agency (CRA) system from April 1, 2015. However, it was observed that majority of the withdrawal requests were still being received in physical form (without capturing online withdrawal request) resulting in delay in processing of withdrawal claims of the subscribers. Therefore, it has been decided that with effect from April 1, 2016 only such withdrawal requests raised on online platform will be accepted at CRA for further processing and settlement.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

Source:PIBNEWS
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Thursday, 18 February 2016

07:46

Digital India:National Pension System Online Registration Of Subscribers using ENPS Platform

Digital India:National Pension System Online Registration Of Subscribers using ENPS Platform

Online Subscriber Registration And Contribution Under NPS Using ENPS Platform

In light of Prime Minister’s “Digital India” campaign on promoting e-governance for providing last mile connectivity through extensive use of ICT (Information and Communications Technology) platforms, Pension Fund Regulatory and Development Authority (PFRDA) has been pursuing the development and operationalization of online transaction facilities for the prospective as well as existing subscribers of NPS. 
PFRDA introduced eNPS online portal whereby PAN (Permanent Account Number) and savings bank account of new subscribers to NPS who are already customers of the banks are accepted as KYC with active participation of the banks acting as POPs for opening of accounts under NPS.
PFRDA has received feedback from prospective subscribers and other stakeholders that those who voluntarily seek to use Aadhaar as their document of identity for availing of the eNPS online platform to join NPS should not be deprived of this eNPS facility. 

As the identity and address for such account holders is established through e-KYC facility with the express consent of the subscriber through One Time Password (OTP) and as Aadhaar is a unique number, its use as a KYC document rules out the possibility of opening duplicate retirement (PRAN) accounts. PFRDA has accordingly revisited the issue and believes that enabling eAadhaar in addition to PAN and bank account based KYC for the eNPS platform can reduce the cost and time of operation and ensure wider coverage to the citizens of India under the old age income security schemes and thus help in fulfilling the mandate given to it under the provisions of the PFRDA Act, 2013. 

PFRDA has accordingly modified the eNPS functionality to accept PAN and bank account or eAadhaar as the KYC document for online registration of subscribers under NPS. With the operationalization of this modified eNPS platform, the subscriber will now have the following options for opening of account: 

• Opening of account through any of the Points-of- Presence- Service Provider (POP-SP). 

• Opening of account online using PAN and net banking of the selected bank. In this case KYC verification is done by the Bank. The PRAN gets activated only after KYC verification by bank. 

• Opening of account online using Aadhaar No. and OTP received from UIDAI. In this case, the subscriber can instantly get their PRAN generated and can contribute. 

The eNPS platform using Aadhaar based KYC verification is one of the options for any prospective subscriber to join NPS and it is optional and purely voluntary on the part of the prospective subscriber. 

To register under NPS through eNPS using Aadhaar, the prospective subscriber needs to have Aadhaar Number/Card with access to the mobile number registered with Aadhaar. 

With the use of this Aadhaar based KYC verification, the subscriber would be able to open his NPS account online. The Prospective subscriber will require to follow the undernoted process for opening of NPS account: 

• The prospective subscriber will go to eNPS platform hosted on NPS Trust website www.npstrust.org.in and enter Aadhaar and validate the same using OTP (Sent on the mobile number registered with Aadhaar). 

• Then he will be required to fill up the mandatory details like choice of Pension Fund, Investment Scheme, nominations etc. 

• Address and Date of Birth details will be auto-populated from details available with Aadhaar. 

• He will be required to provide a mobile number and email ID (Mandatory requirement). 

• He will be required to Scan and upload the signature. Subscriber may also upload a scanned photograph, in case he/she wishes to replace the photo obtained from Aadhaar, if the Aadhaar photo is blurred or hazy. 

• He will be required to make online payment (Minimum amount of Rs 500/-).

• After completion of this process, the PRAN will be generated instantly. 

Subscriber will be required to print the form, paste photograph, affix signature and submit the physical form to CRA within a specified period of time while continuing contributing online. 

A prospective subscriber can visit NPS Trust website www.npstrust.org.in and select NPS Online menu to register and contribute to NPS. 

The complete information about eNPS is available on PFRDA website www.pfrda.org.in and also on NPS Trust website www.npstrust.org.in . 
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Friday, 15 January 2016

21:39

NPS – Revised guidelines on contribution collection and service charges

NPS – Revised guidelines on contribution collection and service charges

PENSION FUND REGULATORY
AND DEVELOPMENT AUTHORITY
1st Floor, ICADR Building, Plot No.6,
Vasant Kunj, Institutional Area,
Phass-II, New Delhi-110070.
CIRCULAR
PFROA/ 2016/CORP/23/1
January  12, 2016
To,
All Points of Presence, Central  Recordkeeping  Agency
Subject:  Revised  Guidelines   in  respect  of Contribution Collection and Service
Charges for opening  NPS accounts for NRls
With  a view  to promote NPS among  Non-Resident   Indians (NRls),  through  Points of Presence (POPs)  the  following changes   have   been   made   in  the  service   chargestructure  and contribution  collection.
A.  Service  Charge  structure  applicable  to POPs   for  NPS accounts  for NRls  sourced and serviced  abroad  :
Intermediary
 Charge Head
Service Charges
Method of
Collection
POP
Initial Subscriber Registration
USD 8 or Equivalent  in local currency.
To be Collected Upfront
Initial Subscriber & all
Subsequent  Contribution
USD 1,  or Equivalent in local  currency or 1%, whichever is higher subject  to maximum of
USD 8 or Equivalent  in local
currency .
All Non-FinancialTransaction
USD 1, or Equivalent  in local currency
(i)  Charges  for all other  intermediaries remain the same.
(ii) For NPS account of NRIs sourced domestically but serviced abroad, i.e. contribution  and other  non-financial transactions being done abroad by the POP, the charge for overseas servicing would  apply.
(iii)    For NPS account  of NRI sourced  overseas  but serviced  in India i.e. contribution and  other  non-financial   transaction being done  in   India,  the  charge  for  domestic servicing  under the existing  All Citizen Model would apply.
(iv)   The contribution  amounts shall  be paid by the  NRls  either by inward  remittance through  normal  banking  channels  or out of funds  held  in their own  NRE/FCNR/NRO account.
B.  Contribution structure for NPS Accounts when serviced abroad would be as under:
Particulars
Tier I 
Tier II
Minimum Contribution  at the  time  of account opening
Rs.6,000/-
Rs.2,000/-
Minimum amount per contribution
Rs.2,000/-
 Rs.2,000/-
Minimum contribution  in  a   financial year
Rs.6,000/-
Rs.2,000/-
Minimum frequency of contributions per financial year
1
 1
While servicing these accounts domestically, the contribution criteria will remain the same as applicable to the existing NPS A/cs under the All Citizen Model.
2. Once the NRI status of the subscriber changes to Resident status, the subscriber will inform the same to CRA/POP for updating the same in the CRA system.
Yours faithfully
(Akhilesh Kumar)
Deputy General Manager




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Monday, 11 January 2016

10:47

eNPS-Online Subscriber Registration and Contribution Facility under NPS developed

eNPS-Online Subscriber Registration and Contribution Facility under NPS developed 

In light of the Prime Minister’s “Digital India” campaign on promoting e-governance for providing last mile connectivity through extensive use of ICT (Information and Communications Technology) platforms, Pension Fund Regulatory Development Authority (PFRDA) has been pursuing the development and operationalization of online transaction facilities for the prospective as well as existing subscribers of NPS. Towards this end, an online platform for registration of subscribers and receipt of contribution under National Pension System (eNPS) through NPS Trust at www.npstrust.org.in has been developed. Through this platform, a prospective subscriber can register for NPS; contribute to his/her Permanent Retirement Account. Further, the subscribers who already have an NPS account can make contributions through eNPS directly. 

A prospective subscriber can visit NPS Trust website www.npstrust.org.in and select NPS Online menu to register and contribute to NPS. 

While registering, a Subscriber will provide his/her name & Permanent Account Number (PAN) details which will be validated online with the Income Tax Department. Subscriber will then select the Bank (through which KYC verification to be done), fill up the personal details and upload photograph & signature. After filling up of details, the Subscriber will make contribution through net banking from the account of the selected Bank. Once payment is made, PRAN will be provided online to the Subscriber. The details submitted by the subscriber will be sent through CRA system to the selected Bank for KYC verification. After verification of KYC by the Bank, the PRAN will become active and operational. Subscriber will be required to print the form, paste photograph, affix signature and submit the physical form to CRA within a specified period while continuing contributing online. 

Subscriber can make subsequent contribution online through net banking /debit card/credit card at any time and the same will be credited in the subscriber’s PRAN account on T+2 basis. 

The complete information about eNPS is available in PFRDA website www.pfrda.org.in and also on NPS Trust websitewww.npstrust.org.in. 

Presently, ten banks viz. Allahabad Bank, Bank of India, Bank of Maharashtra, Oriental Bank of Commerce, South Indian Bank, State Bank of Travancore, State Bank of Hyderabad, State Bank of Patiala, Tamilnadu Mercantile Bank and United Bank of India have provided the facility of online KYC verification. PFRDA has advised all other Bank POPs to join the eNPS platform and provide online verification of KYC for the customers of their Banks willing to open NPS account online. 

Through this facility, it is expected that the subscriber will have multiple advantages like seamless on boarding experience where he need not visit a Point of Presence and can register from anywhere through an internet connection, contribution with minimum cost of transaction and reduction in errors resulting from various manual activities. 

Currently, NPS has more than 1.13 Crore subscribers with total Asset under Management (AUM) of more than Rs. 1.08 lakh crore. 

Source:PIBNEWS
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Thursday, 5 November 2015

08:28

Clarification of Deferred withdrawal of lump sum – New Pension Scheme

Clarification of Deferred withdrawal of lump sum – New Pension Scheme

PENSION FUND REGULATORYAND DEVELOPMENT AUTHORITY

1st Floor, ICADR Building, Plot No. 6

Vasant Kunj Institutional Area,

Phase – II, New Delhi – 110070

CIRCULAR

PFRDA/2015/24/EXITS/1

October 29, 2015

To,

NPS Trust, All POP’s, Aggregators, CRA,Central, State Governments and All Subscribers

Dear Sir/Madam,

Sub: Clarification of Deferred withdrawal of lump sum

PFRDA (Exits and Withdrawals from Nation Pension System) Regulations 2015 provides option to subscriber to defer withdrawal of lump sum (60%) up to the age of 70 years.

Under the Deferred withdrawal facility, the subscribers at the time Of exit from National Pension System (NPS) can exercise an option to defer the withdrawal of eligible lump sum withdrawal and stay invested in the NPS. Subscriber has an option to withdraw the deferred lump sum amount in maximum ten annualinstallments up to the age of 70 years or withdraw the entire amount at once by giving 15 days advancenotice during such a period of deferment.

If no such notice is given, the accumulated pension wealth would be automatically monetized and credited to his bank account upon attaining the age of 70 years.

This is for the information of all concerned. The circular also is being placed on PFRDA website at http://www.pfrda.org.in, NPS Trust website www.npstrust.org.in and CRA website at http://www.npscra.nsdl.co.in.

Yours faithfully,

Subroto Das

Chief General Manager
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Sunday, 2 August 2015

15:58

NATIONAL PENSION SYSTEM for NON RESIDENT INDIANS- FAQ



FREQUENTLY ASKED QUESTIONS

NATIONAL PENSION SYSTEM for NON RESIDENT INDIANS


About NPS

1. What is National Pension System?

NPS is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. Under the NPS, the individual contributes to his retirement account. NPS is designed on Defined contribution basis wherein the subscriber contributes to his own account. The benefit subscribers ultimately receive depends on the amount of contributions, the returns made on the contributions and the period of contributions.




Contributions (Individual contributions) + Investment Growth – Charges = Accumulated Pension Wealth

2. What is the NPS Architecture?


PFRDA has put in place an unbundled architecture managed through a set of Intermediaries who have experience in their own areas of operations. Each intermediary, looking after specific activities such as record keeping, fund transfers, fund management and custodial services etc., has been selected through competitive bidding process to bring about the advantages of low-cost and effective checks & balances in the system to the subscriber.


  • Central Record keeping Agency- Appointed by PFRDA and entrusted with the record keeping of the data of individual subscribers; also acts as an interface between the different intermediaries in the NPS system.



  • Points of Presence (PoP) and POP-Service Provider (PoP-SP)- Appointed by PFRDA, they include mainly commercial banks who act as the first points of interaction of the NPS subscriber under the NPS architecture. The authorized branches of a POP, called Point of Presence Service Providers (POP-SPs), act as collection points and extend a range of customer services to NPS subscribers.

  • NPS Trust & Trustee Bank- The NPS Trust (established by the PFRDA) is responsible for taking care of the funds under the NPS. The Trust holds an account with a bank and this bank is designated as ‘Trustee Bank’. The Trustee Bank remits funds to the entities viz. Pension Funds (PFs), Annuity Service Providers (ASPs) and subscribers on receipt of instructions from CRA.

  • Pension Funds- Appointed to invest the Pension Fund contribution of all the subscribers in various schemes.

  • Annuity Service Providers- Are life insurance companies regulated by IRDA and empanelled with PFRDA for investing subscriber retirement savings in Annuity scheme and delivering monthly pension to the subscriber.

  • Custodian- Stock Holding Corporation of India Limited has been appointed as a Custodian for providing custodial services to the NPS.


3. What are the features of the retirement account provided under NPS?

The following are the most prominent features of the retirement account under NPS:
  • Every individual subscriber is issued a Permanent Retirement Account Number (PRAN) card which has a 12 digit unique number.


  • Under NPS account, two sub-accounts – Tier I & II are provided. Tier I account is mandatory and the subscriber has option to opt for Tier II account opening and operation. The following are the salient features of these sub-accounts:
  • Ø Tier-I account: This is a permanent retirement account where under withdrawals up to 25% of the subscribers’ own contribution are permitted as per the Withdrawal and Exit Regulations (discussed in detail under Exit & Withdrawal section of this FAQ).

  • Ø Tier-II account: This is a voluntary savings facility available as an add-on to any Tier-1 account holder. Subscribers will be free to withdraw their savings from this account whenever they wish.


4. In what way is the NPS Portable?

The following are the portability features associated with NPS
  • NPS account can be operated from anywhere in the country irrespective of individual employment and location/geography.

  • Subscribers can shift from one sector to another like Private to Government or vice versa or Private to Corporate and vice versa. Hence a private citizen can move to Central Government, State Government etc with the same Account. Also subscriber can shift within sector like from one POP (Point of Presence) to another POP and from one POP-SP (Point of Presence Service Provider) to another POP-SP. Likewise, an employee who leaves the employment to become a self-employed, can continue with his individual contributions. If he enters re-employment he may continue to contribute and his employer may also contribute and so on.

  • – The subscriber can contribute to NPS from any of the POP/ despite not being registered with them and from anywhere in India.


5. Can I have more than one NPS account?

No, multiple NPS accounts for a single individual are not allowed and there is no necessity also as the NPS is fully portable across sectors and locations.

Eligibility

6. Can an NRI join NPS?

Yes, an NRI between the age of 18 – 60 years, as on the date of submission of his/her application and complying with the extant KYC norms, can open an NPS account.

7. Can an NRI open a joint account in NPS?

No, only an individual account can be opened in NPS.

8. Is account operation with Power of Attorney (POA) allowed under NPS for NRIs?

At present, POA facility is not available in NPS.


NPS Account Opening

9. How and where can I open a NPS account?

NPS is distributed through authorized entities called Points of Presence (POP). Almost all the banks (both private and public sector) in India are enrolled to act as Point of Presence under NPS. To invest in NPS, you are required to open an NPS account through a POP bank, preferably where you have your NRI account. You can send your NPS application form to your Bank for opening of the NPS account.

10. How will I know about the status of my PRAN (Permanent Retirement Account Number) application form?

Subscriber can check the status by accessing NSDL e-Governance Infrastructure Ltd., the CRA website: https://cra-nsdl.com/CRA/ by using the 17 digit receipt number provided by POP-SP or the acknowledgement number allotted by CRA-FC (Facilitation Centre) at the time of submission of application forms by POP-SP. Once the PRAN is generated, an email alert as well as a SMS alert will be sent to the registered email ID and mobile number of the subscriber.

11.What are the documents that need to be submitted for opening a NPS account?

The following documents need to be submitted to your Bank (POP) for opening of a NPS account:

a. Completely filled in subscriber registration form

b. Copy of Passport

c. Proof of Address, if the local address is different from the address in your passport.

12. Can I appoint nominees for the NPS Tier I and Tier II Account?

Yes, you need to appoint a nominee at the time of opening of a NPS account in the prescribed section of the registration form. You can appoint up to three nominees in your NPS Tier I and NPS Tier II account. In such a case you are required to specify the percentage of share, which should not be in decimals that you wish to allocate to each nominee. The share percentage across all nominees should collectively aggregate to 100%.

13. I have not made any nomination at the time of registration. Can I nominate subsequently? What is the process?

If you have not made the nomination to your NPS account at the time of registration, you can do the same after the allotment of PRAN. You will have to visit your PoP and place Service Request to update nominations details.

14.Are there any charges for making a nomination?


If you are making the nomination at the time of registering for PRAN, no charges will be levied to you. However, a subsequent request for nomination updation would be considered as a service request and you will be charged an amount of Rs. 20/- plus applicable service tax for each request.

15.Can I change the Nominees for my NPS Accounts?

Yes, you can change the nominees in your NPS Tier I account at any time after you have received your PRAN.


NPS– Charges


16.What are charges applicable in NPS?

Intermediary
Charge Head
Service Charge
Method of Deduction
POP
Initial Subscriber Registration
Rs. 125
To be Collected Upfront
Initial Contribution
0.25% Min: Rs. 20 & Max : Rs.25,000
All Subsequent Contribution
All Non-Financial Transaction
Rs. 20
CRA
PRA Opening (One Time)
Rs. 50
Through NAV cancellation/ deduction
PRA Maintenance (Per Annum)
Rs. 190
Per Transaction (Financial/Non- Financial)
Rs. 4
Custodian
Asset Serving (Per Annum)
0.0075%
PFM
Investment Management (Per
Annum)
0.01%

NPS– Contributions, Investments and Asset Classes
17.Are there any minimum annual contribution requirements under NPS? How can I reactivate / unfreeze the account if frozen due to minimum contribution requirements?

Yes, a subscriber has to contribute a minimum annual contribution of Rs.6000/- for his Tier I account in a financial year and if not contributed the account will be frozen. In the first year, the account will remain active, but from 2nd year onwards if minimum contribution is not made, account will be frozen. In order to unfreeze the account, the customer has to pay the total of minimum contributions for the period of freeze, the minimum contribution for the year in which the account is reactivated and a penalty of Rs.100/-. In order to unfreeze an account the subscriber has to approach the Point of Presence (POP) and deposit the required amounts. The following table provides the complete information on the minimum contribution requirements:

For All citizens model
Tier I
Tier II
Minimum Contribution at the time of account opening
Rs. 500
Rs. 1000
Minimum amount per contribution
Rs. 500
Rs. 250
Minimum total contribution in the year
Rs. 6000
Rs. 2000
Minimum frequency of contributions
1 per year
1 per year

18.How are the funds contributed by the subscribers managed under NPS?

The funds contributed by the Subscribers are invested by the PFRDA registered Pension Fund Managers (PFMs) as per the investment guidelines prescribed by PFRDA. The investment guidelines are framed in such a manner that the portfolio is adequately diversified across financial securities so that there is minimal impact on the returns on subscribers contributions even if there is a market downturn, by ensuring a judicious mix of investment instruments like Government securities, corporate bonds and equities. At present there are eight Pension Fund Managers who manage the funds at the option of the subscriber.

They are as follows:
  • ICICI Prudential Pension Funds Management Company Limited
  • LIC Pension Fund Ltd
  • Kotak Mahindra Pension Fund Ltd
  • Reliance Capital Pension Fund Ltd
  • SBI Pension Fund Pvt Ltd
  • UTI Retirement Solutions Ltd
  • HDFC Pension Management Company
  • Pension fund to be incorporated by Birla Sun Life Insurance company limited

19.Where will the funds contributed by NRIs in NPS be invested?


NRIs have option to select Pension Fund Manager and exercise investment choice under NPS All Citizen Model. The fund is invested by the selected Pension Fund Manager in the various classes of securities, as per the investment guidelines prescribed by PFRDA. The investment is usually in Equity (E), Corporate Bonds (C) and /or Government Securities (G). The individual subscriber has a choice of selecting investment mix (E,C,G), as per his/her risk appetite.

20.In what form can the contribution be made i.e. foreign exchange or Indian currency?

The contributions made by NRIs can be from either of the following sources subject to normal foreign exchange conversion norms:

– NRE Account
– NRO Account/ Local sources

21.What are the different Fund Management Schemes available to the subscriber?

The NPS offers two approaches to invest subscriber’s money:

  • Active choice – Here the individual would decide on the asset classes in which the contributed funds are to be invested and their respective proportions (Asset class E- maximum of 50%, Asset Class C, and Asset Class G )
  • Auto choice – Lifecycle Fund- This is the default option under NPS and wherein the management of investment of funds is done automatically based on the age profile of the subscriber. As the age of the subscriber progresses, the exposure of the fund to Equity (E) and Corporate Debt (C) is reduced and enhanced in Government securities as a risk protection measure. For full details, one may go through our website www.pfrda.org.in wherein the full details of the investment choices and fund management details are provided.

22.Can I switch from one investment scheme to another and/or Pension Fund Manager and if so, how?

Yes, NPS offers its subscribers the option to change the scheme preference. Subscriber has an option to realign his investment in asset class E, C and G based on age and future income requirement. Also, the subscriber has option to change the PFM and the investment option (active/auto choice) once a year, free of charge.

23.Is there any default Pension Fund Manager (PFM) Option provided under NPS?

Yes, there is a default PFM provision under NPS and presently, SBI Pension Funds Private
Limited is the default Pension Fund Manager.

24.Can I have a different Pension Fund Manager and Investment Option for my Tier I and Tier II account?

Yes. You may select different PFMs and Investment Options for your NPS Tier I and Tier II accounts.

Tax Benefits and Implications
25. For NRIs, what would be the status of repatriation of the pension/ annuity and lump sum to be paid out of the invested funds ?

When the pension/ annuity is to be paid, it shall be in local currency only (i.e. in INR). However, there is no restriction on repatriation of pension, whether paid as annuity or in lump sum. Provisions of Income Tax Act, 1961 subject to amendments from time to time, would be applicable.

26.Will payment of pension and withdrawal of the lump sum amount be treated as a current account transaction or a capital account transaction?

Since withdrawal of lump sum or payment of pension is treated as income and chargeable to Income Tax, therefore both the operations will be treated as a current account transaction.

27.What income tax reliefs are available to the individuals contributing to NPS?

Tax benefit to self-employed:

Eligible for tax deduction up to 10 % of gross income earned from Indian sources under Sec 80 CCD(1) with in the overall ceiling of Rs. 1.5 lac under Sec 80 CCE of IT Act, 1961.

Additional Tax benefit w.e.f 2015-16

From F.Y. 2015-16, subscriber are allowed extra tax deduction in addition to the deduction allowed under Sec. 80CCD(1) for additional contribution in his NPS account subject to maximum of Rs.50,000/- under sec. 80CCD 1(B) of IT Act, 1961.

Exit & Withdrawal
28.Will NRIs have different Exit & Withdrawal rules?

No, Exit & Withdrawal rules for NRIs shall be the same as for residents under the PFRDA (Exit and Withdrawals under the National Pension System) Regulations, 2015. All forms are available at www.npscra.nsdl.co.in.

29.What are the Exit rules applicable for NRIs?

The Exit rules applicable for NRIs are
  • Upon attaining the age of 60 years
  • Exit from NPS before the age of 60 years
  • Upon Death of the Subscriber

30.What are the applicable provisions for withdrawal of the accumulated pension wealth once I attain 60 years of age?

At least 40% of the accumulated pension wealth of the subscriber needs to be utilized for purchase of an annuity providing for the monthly pension of the subscriber and the balance is paid as a lump sum payment to the subscriber. In case, the accumulated pension wealth is equal to or less than a sum of two lakh rupees, the subscribers have the option to withdraw the entire accumulated pension wealth without purchasing any annuity.

31.What will happen to my savings if I decide to retire or do not want to continue in the NPS before age 60?

Such a premature exit would only be allowed to subscribers who have been with the NPS for at least 10 years. In such case, at least 80% of the accumulated pension wealth of the subscriber needs to be mandatorily utilized for purchase of an annuity providing for the monthly pension of the subscriber and the balance is paid as a lump sum payment to the subscriber.

32.In the event of the death of subscriber before attaining the age of 60 years, what will be the benefit that is payable and who will get the benefits ?

In the unfortunate event of death of the subscriber, the entire accumulated pension wealth of the subscriber shall be paid to the nominee or nominees or legal heirs, as the case may be, of such subscriber. Also, the nominee or family members of the deceased subscriber shall have the option to purchase any of the annuities being offered upon exit, if they so desire.

33.How to withdraw the benefits available under NPS?

The subscriber wishing to exit from NPS has to submit a withdrawal application form to the concerned POP along with the documents specified for withdrawal of the benefits and the POP in turn would authenticate the documents and forward them to CRA – NSDL. CRA in turn would register your claim and forward you the necessary application form along with the procedure to be followed and documents that need to be submitted. Once the documents are received, CRA in consultation with NPS Trust processes the application and settles the account. . All forms are available at www.npscra.nsdl.co.in.

34.What are the documents that need to be submitted along with the withdrawal forms?

Following documents are required to be submitted along with the withdrawal forms in order to settle the claims:

1. PRAN card in original

2. Attested copy of Proof of Identity (e. g. Passport, Aadhar Card, PAN Card, Valid Driving License, Voter ID Card etc.)

3. Attested copy of Proof of Address (e. g. Passport, Aadhar Card, Valid Driving License, Voter ID Card etc.)

4. Cancelled cheque (containing Subscriber Name, Bank Account Number and IFS Code) or Bank Certificate Containing Name, Bank Account Number and IFSC code, for direct credit or electronic transfer.

Note: An illustrative list of documents acceptable as proof of identity and address can be seen at PFRDA circulars available on PFRDA’s website pfrda.org.in.

35.Can an NPS subscriber defer his lump sum withdrawable amount (up to 60%) under NPS at the time of exit at 60 years?

Yes, one can defer the withdrawal of the eligible lump sum amount payable under NPS till the age of 70 years.

36.Upto what age can an NPS subscriber contribute beyond the age of 60 years?

The subscriber can continue to subscribe to the National Pension System beyond the age of sixty years, the age, not exceeding seventy years, until which he would like to contribute to his individual pension account.

37.Can I use more than 40% of my accumulated pension wealth to purchase the annuity at the time of exit from NPS upon attaining the age of 60 years?

Yes, a subscriber at the time of attaining the age of 60 years can purchase annuity up to 100% of his accumulated pension wealth.

38.Can a NPS subscriber defer his annuity purchase under NPS at the time of exit on 60 years?

Yes, one can defer the mandatory purchase of annuity for a maximum period of 3 years, at the time of exit from NPS.

39.What will happen to my withdrawal if my PRAN is in frozen or inactive state at the time of withdrawal?

The CRA will unfreeze the account by charging the penalty applicable and process the withdrawal claim without payment of any extra amounts by the subscriber.

Partial Withdrawals under NPS
40.Are partial withdrawals allowed under NPS?

Yes, partial withdrawals are allowed under NPS.

A partial withdrawal of accumulated pension wealth of the subscriber, not exceeding twenty-five per cent of the contributions made by the subscriber provided, that the subscriber shall have been in the National Pension System at least for a period of last ten years from the date of his or her joining.

41.What are purposes for which the partial withdrawals are allowed under NPS?

– For the purpose of higher education of his/her children,

– For marriage of his/her children,

– For purchase or construction of residential house or flat

– For treatment of specified illnesses.

42.What can be the frequency of the partial withdrawals as allowed under NPS?

The subscriber shall be allowed to withdraw only a maximum of three times during the entire tenure of subscription under the National Pension System and not less than a period of five years shall have elapsed from the last date of each of such withdrawal.

Annuity, Annuity Schemes and Annuity Service Providers

43.What is an annuity?

An annuity is a financial instrument which provides for a regular payment of a certain amount of money on monthly/quarterly/annual basis for the chosen period for a given purchase price or pension wealth. In simple terms it is a financial instrument which offers monthly/ quarterly/ annual pension at a specified rate for the period you chosen by you.

44.What are the different types of annuities providing for monthly pension available to the subscribers of NPS?

The following are the generic annuities that are offered by Annuity Service Providers to the subscribers of NPS. However, some of the ASPs may offer some variants which have slightly different or combination of annuities.
  1. Pension (Annuity) payable for life at a uniform rate to the annuitant only.
  2. Pension (Annuity) payable for 5, 10, 15 or 20 years certain and thereafter as long as you are alive.
  3. Pension (Annuity) for life with return of purchase price on death of the annuitant (Policyholder).
  4. Pension (Annuity) payable for life increasing at a simple rate of 3% p.a.
  5. Pension (Annuity) for life with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
  6. Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
  7. Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant and with return of purchase price on death of the spouse. If the spouse predeceases the annuitant, payment of annuity will cease after the death of the annuitant and purchase price is paid to the nominee.
45.What are the factors that determine the annuity income when you buy an annuity?

The size of your pension wealth/corpus determines your monthly annuity/pension. Bigger the accumulated pension wealth or corpus used for purchase of annuity, the higher would be the monthly pension that is received. Besides that, amount of annuity may also vary according to the type of annuity variant selected by the subscriber.

46.What are the Annuity Service Providers under NPS and what are their names?

Indian Life Insurance companies which are licensed by Insurance Regulatory and Development Authority ( IRDA) are empanelled by PFRDA to act as Annuity Service Provider’s to provide annuity services to the subscribers of NPS. Currently, the following ASPs are empanelled by PFRDA.

2. Life Insurance Corporation of India
3. SBI Life Insurance Co. Ltd.
4. ICICI Prudential Life Insurance Co. Ltd.
5. Bajaj Allianz Life Insurance Co. Ltd.
6. Star Union Dai-ichi Life Insurance Co. Ltd.
7. Reliance Life Insurance Co. Ltd.
8. HDFC Standard Life Insurance Co. Ltd

Note: The ASP empanelment process is an ongoing process and the list of ASPs may change in future.

47.What is the default annuity scheme and default ASP under NPS?

The following default annuity service provider along with the annuity scheme is available to all the subscribers under National Pensions System.

1. Default Annuity Service Provider – Life Insurance Corporation of India (LIC)

2. Default Annuity Scheme – Annuity for life with a provision of 100% of the annuity payable to spouse during his/her life on death of annuitant and under this option, payment of monthly annuity would cease once the annuitant and the spouse die or after death of the annuitant if the spouse pre-deceases the annuitant, without any return of purchase price.

However, it may be noted that default option is being purely provided in the subscribers’ interest and to avoid any delay in claim processing and is not with a view to endorse/promote any particular ASP or annuity variant being offered by the ASP. If the amount available in NPS account of subscriber is not adequate to buy the default annuity variant and from the default ASP, the subscriber has to compulsorily choose an ASP who offers an annuity at the available corpus in the account of the subscriber.

48.How the annuity OR monthly pension is paid?

Monthly pension /Annuity will be paid through direct bank transfer to the specified subscribers account only through Annuity Service Providers.

Grievance Redressal Management System

49.I have a NPS account and have a grievance on the services provided. To whom should I complain and how?

The subscriber can raise grievance through any of the modes mentioned below:

– Call Centre/Interactive Voice Response System (IVR)
Ø The Subscriber can contact the CRA call center at toll free telephone number 1-800-222080 and register the grievance by using T-PIN.
Ø Dedicated Call center executives.

– Physical forms direct to CRA
Ø The Subscriber may submit the grievance in a prescribed format to the POP – SP who would forward it to CRA Central Grievance Management System (CGMS).
Ø Subscriber can directly send form to CRA.

– Web based interface
Ø The Subscriber may register the grievance at the website www.npscra.nsdl.co.in with the use of the I-pin allotted at the time of opening a Permanent Retirement Account.

SOURCE: Staffnews.


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